## Facts

- Morelite Construction Corp., a contractor on two New York City projects (1979–1980), signed job agreements incorporating a master collective bargaining agreement with a grievance-and-arbitration procedure covering fringe-benefit contribution disputes.
- The New York City District Council Carpenters Benefit Funds audited Morelite and claimed it was delinquent by roughly $80,000 in benefit-fund contributions.
- The dispute reached federal court, which compelled arbitration under the collective bargaining agreement and the Federal Arbitration Act (FAA).
- Patrick M. Campbell, Jr. was appointed arbitrator.
- Morelite objected to Campbell Jr.’s appointment because his father, Patrick Campbell, Sr., was a high-ranking officer of the international union affiliated with the District Council (a party to the arbitration).
- The district court denied the disqualification request; arbitration proceeded and resulted in an award of $128,429.50 against Morelite.
- Morelite moved to vacate the award under FAA § 10(a)(2) for “evident partiality”; the district court denied vacatur and confirmed the award.

## Issues

1. Whether a father–son relationship between an arbitrator and a high-ranking officer of an entity affiliated with a party constitutes “evident partiality” requiring vacatur under FAA § 10(a)(2).
2. Whether Morelite waived its objection to the arbitrator’s alleged partiality by participating in the arbitration after learning of the relationship.

## Decision

- The Second Circuit reversed the district court’s confirmation of the award.
- The court held that the father–son relationship between the arbitrator and a high-ranking officer of the party-affiliated international union constituted “evident partiality” under FAA § 10(a)(2).
- The court rejected the waiver argument, concluding Morelite objected promptly after learning of the arbitrator’s identity and relationship.
- The case was remanded with instructions to vacate the arbitration award.

## Legal Principles

- Under FAA § 10(a)(2), an award must be vacated where “evident partiality” is shown.
- “Evident partiality” is satisfied when a reasonable person would have to conclude the arbitrator was partial to one side; actual bias or corruption need not be proven.
- Arbitrators are not held to the same level of detachment as judges, but arbitration still requires a baseline of neutrality sufficient to sustain confidence in the process.
- Certain close familial relationships between an arbitrator and a party (or a party’s senior officer) are so inherently compromising that they establish evident partiality.
- A party does not waive an evident-partiality objection when it lacked relevant knowledge at the time it agreed to arbitrate and raises the objection promptly upon learning the facts.

## Conclusion

The Second Circuit vacated the award because the arbitrator’s father–son relationship with a high-ranking union officer connected to a party created evident partiality under FAA § 10(a)(2), and the contractor’s timely objection preserved the issue.


Morelite Constr. Corp. v. N.Y.C. Dist. Council Carpenters Benefit Funds, 748 F.2d 79 (2d Cir. 1984)